Mumbai: A core group of lenders asked grounded Kingfisher Airlines Ltd to infuse at least Rs.800 crore into the carrier before the banks considered any further loan recast and the extension of a no-objection certificate (NOC) that would enable the airline to resume flights.

The bankers, in a lenders’ meet on Friday, asked the airline to clear some of its dues to them and pay employees’ salaries, according to two senior bankers.

Fourteen of the 17 banks with exposure to Vijay Mallya’s Kingfisher Airlines will meet by the end of this month to decide the future course of action in case the airline brings the funds, they said, both declining to be identified.

“All consortium members will meet again by the end of this month to take a final call. Until and unless we give a no-objection certificate, DGCA (Directorate General of Civil Aviation, the regulator) will not give the airline permission to restart,” said one of the bankers.

Employees haven’t been paid since June. Kingfisher Airlines is working on a plan to restart operations by the end of February, in support of which it has made seven small ATR planes ready for inspection by the aviation regulator and retrained a few pilots.

However, the plan is subject to approval by the DGCA, various airport operators, including the state-run Airports Authority of India, and lenders.

Kingfisher’s operating licence was suspended in October by DGCA following a strike by the airline’s employees. The licence has since expired, although it can be renewed within two years.

On 16 January, Kingfisher Airlines informed DGCA that the airline had secured some no-objection certificates from aircraft leasing and oil marketing companies.

But DGCA maintained the airline should get no-objection certificates from lenders and airport operators as well.

The airline has held creditors and employees who have not been paid salaries for several months at bay by holding out the promise of a revival, infusion of funds by promoters, and the entry of a foreign investor. Unfortunately, none of these have played out as promised.

On Friday, Kingfisher Airlines shares ended at Rs.14.21 on BSE Ltd, up 0.28%, while the benchmark Sensex rose 0.38% to close at 20,039.04 points.

On Monday, Mint’s Bankers’ Trust column had said the banks want around Rs.800 crore on the table for themselves—half of which is technically called an “irregular amount”, or dues not paid by Kingfisher Airlines. This means Mallya will need to bring in at least Rs.1,450 crore to restart operations (that is, if the Rs.650 crore the company has cited previously is enough to cover other obligations at this point).

In a presentation to lenders last year, promoter Mallya had said Kingfisher would resume operations with seven aircraft and increase it to 21 in four months. At its peak, Kingfisher Airlines was flying 66 planes to 68 locations, including eight international destinations, with 374 flights a day, and accounted for 20% of the market. In a 10 January letter to employees, Mallya reassured them that the airline will begin flying by this summer with a Rs.650 crore infusion from parent UB Group.

“The limited restart plan, which we target for the beginning of the 2013 summer schedule, requires a funding of approximately Rs.650 crore, which is committed to be provided by the UB Group and associates,” Mallya said in the letter.

The aviation ministry official cited above said the airline was yet to furnish assurances from the promoter on the required funds and that the plan has no fiscal depth as Rs.650 crore wouldn’t last very long.

Some employees have planned a hunger strike from 21 January demanding salaries. Another group is planning legal action seeking closure of the airline, while a third is demanding a meeting with Mallya.

The airline owes banks around Rs.7,000 crore.

Analysts have previously said the grounded airline needs between Rs.3,000 crore and Rs.5,000 crore to fly again in any meaningful way.

Consulting firm Centre for Asia Pacific Aviation expects Kingfisher Airlines’ resumption with five to seven aircraft to be a realistic prospect, although challenges remain, Kapil Kaul, chief executive officer (South Asia), told Mint on 16 January. The airline should demonstrate the availability of funds, and the no-objection certificates from airport operators are essential, he said.

“Kingfisher Airlines is likely to scale to about 20 to 22 aircraft in a few months, post the resumption,” Kaul said. “The restart is aimed at winning back customer, employee, market regulator’s confidence by delivering reliable, safe and orderly operations, while simultaneously finalizing strategic and financial investors to fully recapitalize the airline. An orderly and stable resumption is more likely to attract investors.”

A debt fund operated by Kolkata-based Srei Infrastructure Finance bought ICICI Bank Ltd’s exposure to the airline in July. The non-banking financial company and Jammu and Kashmir Bank have shares of United Spirits and McDowell Holdings Ltd as collateral. The current market value of these shares is about Rs.350 crore—more than their exposure. The consortium has an arrangement with these two entities to get hold of the additional shares and sell them to recover their dues.